Under Section 72 of the Water Act 2016, Wasreb is required to evaluate and recommend water and sewerage tariffs to the County water services providers and approve the imposition of such tariffs in line with consumer protection standards. The objectives of tariff review are to:
- Ensure financial sustainability
- Foster access to Safe Water as a Human Right
- Promote efficiency in the delivery of water services
- Encourage conservation
- Ensure simplicity in the pricing structure of water.
The tariff review process is necessitated by the following factors:
- Dependence on subsidy which has become unsustainable
- Tariffs that outlived their usefulness
- Continued rise in cost of inputs
- Increment in cost of electricity, fuel and their spiraling effect
- Unsustainability of most WSPs and Water Works Development Agencies (WWDAs)
Under the Licence, tariffs charged are meant to accommodate the need to have cost recovery, cross subsidization, and where feasible the expansion of infrastructure.
The tariff review process focuses on balancing commercial and social interests in water service provision. The fixing of tariffs considers justified costs, in order to eliminate any costs that may result from inefficiency, and which should not be borne by consumers.
Wasreb has developed the Tariff Guideline with the objective of fixing tariffs that balance commercial, social and ecological interests thus ensuring access to all while allowing WSPs and WWDAs to recover justified costs. Recognizing that WSPs differ in category and size, the Guideline addresses different requirements as follows:
- Setting out approaches to tariff adjustment
- Spelling out requirements that WSPs and WWDAs should meet for tariff adjustment applications
- Setting out methodologies for tariff review analysis, approval and subsequent adjustments over time